Economic Aspects of the Irish Exchange Control Regime. Quarterly Economic Commentary Special Article, April 1980

Durkan, J. and O'Loughlin, B. and Kelleher, R. and McCarthy, Colm (1980) Economic Aspects of the Irish Exchange Control Regime. Quarterly Economic Commentary Special Article, April 1980. [Working Paper]

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Abstract

From the foundation of the State until March 1979, the Irish currency was maintained in a fixed one-to-one parity with the pound sterling. Aside from the 50% deposit requirement on capital inflows through the banking system imposed by the Central Bank in recent years, there were no significant restrictions on the movement of funds between Ireland and the sterling area. Capital movements between Ireland and non-sterling countries were subject to exchange control regulations broadly similar to the UK's own, although in practice they were administered in a somewhat more liberal fashion. The Irish controls could be seen as, in effect, part of the price of our membership of the sterling zone, since the UK's own controls would have been circumvented very readily if Ireland had presented an uncontrolled "window" to the rest of the world. So purchases of financial assets in non-sterling countries had to be financed through the dollar premium pool or through foreign currency loans.

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